Starling Co. is considering disposing of a machine with a bo…

Starling Co. is considering disposing of a machine with a book value of $23,800 and estimated remaining life of five years. The old machine can be sold for $6,000. A new high-speed machine can be purchased at a cost of 69,900. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,500 to $19,700 if the new machine is purchased. What is the differential effect on income for the new machine for the entire five years?

An anticipated purchase of equipment for $490,000 with a use…

An anticipated purchase of equipment for $490,000 with a useful life of 8 years and no residual value is expected to yield the following annual net incomes and net cash flows: Year Net Income Net Cash Flow 1 $60,000 $110,000 2 50,000 100,000 3 50,000 100,000 4 40,000 90,000 5 40,000 90,000 6 40,000 90,000 7 40,000 90,000 8 40,000 90,000 What is the cash payback period?

Falcon Co. produces a single product. Its normal selling pri…

Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $15 per unit. Fixed costs are $19,100 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,550 units with a special price of $19 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income?